Mutual Fund News

Two star managers leave Altamira

By CAROLYN LEITCH

Thursday, November 28, 2002

INVESTMENT REPORTER

A shakeup at Altamira Investment Services Inc. sent two of its star fund managers out the door, as the mutual fund company seeks to change direction in the wake of lagging fund performance, heavy redemptions by investors and a recent takeover by National Bank of Canada.

Toronto-based Altamira announced yesterday that Ian Ainsworth, manager of the flagship Altamira Equity Fund, and Robert Marcus, manager of the Altamira Bond Fund, have left the company.

Altamira president and chief executive officer Chris Hodgson said the company made the decision Tuesday night to "move in a different direction."

Altamira will still focus on growth-oriented investing, Mr. Hodgson said.

But it will aim to deliver more consistent, predictable returns in core funds, Mr. Hodgson added.

Mr. Ainsworth yesterday called his departure "amicable," but declined further comment.

Mr. Ainsworth, who was head of Canadian equities for the firm, was named fund manager of the year by the Canadian mutual fund industry in 1999 and 2000, when the Altamira Equity Fund skyrocketed with the value of Nortel Networks Corp. and other tech high fliers. He took over managing the fund from Frank Mersch in 1998.

But the fund has struggled in the past two years as the bear market favoured a value-oriented type of investing over Mr. Ainsworth's more aggressive growth style.

Virginia Wai-Ping will take over as lead manager of the Altamira Equity Fund and lead the company's Canadian equity team. Ms. Wai-Ping most recently worked at Talvest Fund Management Inc. as portfolio manager for the Talvest Canadian Equity Leaders Fund. Previously, Ms. Wai-Ping gained a strong reputation as manager of the CIBC Canadian Small Companies Fund. She was also named best small- to mid-capitalization fund manager at the 2001 Canadian Mutual Fund Awards gala.

Anne-Marie Thomas, who has been on the Altamira fixed-income team since 1998, will now become lead manager of the Altamira Bond Fund. She will work with co-managers Edward Jong and Dagmar Pagel.

Gisele Wilson was appointed to the newly created position of chief investment officer, and Ann Thompson has been named portfolio manager for the Altamira global equity team.

Like many in the fund industry, Altamira has suffered large outflows of cash as mutual fund investors pull their money out of struggling equities. The firm's assets under management, which currently stand at $4.1-billion, slid 18.7 per cent in the year ended Oct. 31.

Analyst Dan Hallett of Sterling Mutuals Inc. noted that out of 57 mutual fund companies reporting their results to the Investment Funds Institute of Canada in October, Altamira posted the sixth-largest percentage decline in assets.

The Altamira Equity Fund's assets have dropped to $806.1-million from more than $2-billion during the tech frenzy. For the year to Oct. 31, Altamira Equity dropped 12.9 per cent, compared with a 6.7-per-cent loss for the average Canadian equity fund and a 7.7-per-cent decline for the S&P/TSX total return index during the same period.

James Gauthier, an analyst at Dundee Securities Corp., said the Altamira Equity Fund really "rode the tech wave," but was not able to recover after the sector crashed in 2002.

The $364.6-million Altamira Bond Fund gained 2.7 per cent in the year to Oct. 31, compared with an average advance of 2.5 per cent for the group and a 4.7-per-cent rise for the SCM Universe Bond Total Return index.

Mr. Gauthier noted that the fund has been a top performer, but he added that Mr. Marcus's aggressive style sometimes made it more volatile compared with other bond fonds.

The latest personnel changes at Altamira follow a stream of departures: Gordon Cheesbrough stepped down as president and CEO of Altamira in September following National Bank's purchase of the company this summer. Two other fund managers -- Shauna Sexsmith and Ian Joseph -- have left in recent weeks.